APYCalculator.com

Treasury Bills (T-Bills)

Typical APY range: 4.00%–5.00%· Backed by US Treasury

Treasury bills (T-bills) are short-term debt securities issued by the US government. They are sold at a discount to face value and redeemed at face value at maturity — buy a $1,000 T-bill at $988 today, redeem it for $1,000 in 13 weeks; the $12 difference is your interest. T-bills are issued in 4-, 8-, 13-, 17-, 26-, and 52-week terms. They are backed by the full faith and credit of the United States, which is a different legal structure than FDIC insurance but has the same practical effect: the federal government stands behind the dollar amount. T-bills carry no FDIC insurance because they are direct US government obligations, not bank deposits.

Rate environment · as of 2026-05-21

Current US Treasury bill rates

3.40% – 3.85% APY

Typical range across leading online Treasury bills (4–26 week). Rates change frequently — verify the current rate at the institution before opening an account.

See top banks →
Where to buy US Treasury bills

Current rates at these sources may fall outside the range shown above — verify at the institution.

TreasuryDirect
  • · 13-week T-bill
  • · State/local income tax exempt
  • · No purchase fee
Visit →
TreasuryDirect
  • · 4-week T-bill
  • · State/local income tax exempt
  • · No purchase fee
Visit →
TreasuryDirect
  • · 26-week T-bill
  • · State/local income tax exempt
  • · No purchase fee
Visit →
TreasuryDirect
  • · 52-week T-bill
  • · State/local income tax exempt
  • · No purchase fee
Visit →

These are widely-recognized sources offering access to US Treasury bills. APYCalculator does not earn commissions on links from this site and is not affiliated with any of these institutions.

The tax wrinkle that makes T-bills different from savings accounts. Interest from T-bills is exempt from state and local income tax. Only federal income tax applies. For savers in high-tax states or cities — California (top marginal rate 13.3%), New York City (combined state and city top rate near 14.776%), Hawaii, Oregon, Minnesota, New Jersey — this exemption can swing the effective after-tax yield meaningfully. As a worked example: a 4.30% T-bill earns the same after-tax return for a California taxpayer in the top bracket as a roughly 4.97% taxable HYSA. For savers in no-income-tax states (Florida, Texas, Tennessee, Washington, etc.), the T-bill exemption is irrelevant and the comparison is purely the headline rate.

How to buy T-bills. Two paths.

The first is TreasuryDirect — the US government's own platform at treasurydirect.gov. No fees, $100 minimum purchase, direct from the Treasury. The interface is dated and the user experience is poor by 2026 standards, but the mechanics work. Auto-roll lets you automatically reinvest matured T-bills into new ones.

The second is a brokerage. Schwab, Fidelity, Vanguard, and others sell new-issue T-bills with no transaction fee and offer auto-roll equivalents. Brokerage purchases are typically more convenient for savers who already use the brokerage for investments, and consolidate bonds, equities, and cash management in one log-in.

Liquidity. T-bills can be sold on the secondary market through a brokerage before maturity, but the price moves with prevailing interest rates. If yields rise after you purchase, your T-bill's market price falls (and vice versa). For T-bills under 13 weeks the price sensitivity is small; for 52-week T-bills it can be material in a fast-moving rate environment. T-bills bought through TreasuryDirect cannot be sold directly through that platform — you would need to transfer them to a brokerage to sell before maturity.

Yield quoting conventions. T-bills are commonly quoted as a "discount yield," "investment yield," or "bond-equivalent yield" — these are not all the same number. The figure most directly comparable to an HYSA APY is the investment yield (also called bond-equivalent yield). The Treasury publishes both numbers in auction results.

Frequently asked questions

Are T-bills safer than FDIC-insured savings accounts?+
They carry equivalent practical safety but a different legal structure. Both are backed by the full faith and credit of the US government. FDIC-insured savings carry an explicit federal guarantee up to $250,000 per depositor per insured bank per ownership category, funded by bank insurance premiums and ultimately backstopped by the government. T-bills are direct obligations of the US government with no dollar limit — the government would have to default on its own debt for a T-bill investor to lose principal. Practically equivalent; legally distinct.
How is T-bill interest taxed?+
T-bill interest is taxed as ordinary income at the federal level. It is exempt from state and local income tax. You will receive Form 1099-INT (or 1099-OID for some Treasury securities) from TreasuryDirect or your brokerage at year-end, with the federal taxable interest reported in Box 3 ("Interest on US Savings Bonds and Treasury obligations"). Most tax software automatically excludes Box 3 interest from state taxable income, but verify with your specific software or tax preparer.
Should I buy T-bills through TreasuryDirect or through a brokerage?+
If you only buy a small number of T-bills per year and don't mind a clunky interface, TreasuryDirect works fine and is fee-free. If you already have a brokerage account at Schwab, Fidelity, or Vanguard, buying T-bills through the brokerage is usually more convenient — same log-in, easier to sell on the secondary market if needed, and cleaner consolidated tax reporting. Both paths cost nothing for new-issue T-bill purchases.
Can I sell a T-bill before it matures?+
Yes, on the secondary market — but only if you hold the T-bill at a brokerage. T-bills purchased through TreasuryDirect would need to be transferred to a brokerage first before they can be sold prior to maturity. Secondary-market prices fluctuate with interest rates: if rates have risen since you bought, your T-bill's sale price will be below face value; if rates have fallen, it may be above face value.
Sources